Net income loss has been substantially drawn down, decreasing over 80%.

Even more importantly, revenue increased by 35%. Revenue increases is the healthiest sign, together with low debt, of a good company. Net losses can always be paired down. If you are in a no-revenue growth mode, things are much tougher to evolve, as you basically have no R&D cash to use without cutting elsewhere. (Ask Intel).

Finally, the drop in sales was only in one segment, semi-custom SoCs and that is because of the Christmas rush for Xbone and PS4. If you had any habit reading corporate balance sheets you know that there is almost always a quarter/over/quarter drop in revenue from Q4 to Q1. Q4 is the peak season for most companies. What matters is year over year.

All in all, this is a good report for AMD. They'll be in the black possibly already in Q2(where we are now) on a net income basis (GAAP-adjusted). The major challenge will be to grow SoC and the server business, but there's no question that they are miles away from the imminent death knell many thought they'd be on back 2 years ago or so. They should be in the black within this year, probably even in this quarter. Then they can start paying down debt, keep growing revenue like they have so far.

It is great! Compared to expectations. The expectations were that AMD would have filed for chapter 11 by now. So in comparison, it's great. That's what these things are about and how they're judged. It means AMD seems like it could turn around towards a profit, which makes it a potential bet for investors.Reply

Yeah, while I'm sure the extra revenue helps, I'm thinking AMD doesn't profit much from that (that's the excuse NVIDIA gave for not competing, anyway). It looks good on paper to have "three design wins" in popular consoles, but the reality is that I'm not sure it's very effective at selling the brand in the PC space, where the extra margin really helps.

AMD owning Nintendo and the 360 business didn't help them on the desktop or mobile (definitely not mobile) in the last round, so I doubt it will help this time.Reply

Well, AMD's GPU division was never really profitable (in absolute terms) and now they are. So even if margins are thin, it apparently helps.

Moreover, while AMD just put together stuff they already had ready at hand otherwise (Jaugar cores + GCN graphics card), so their R&D for these customisations was quite limited. On the other hand, nVidia certinaly did not have anything competitive on the CPU front, so their investmetns there would have to be massive.Reply

Well you are kind of talking apples to oranges here. The actual architecture in the new consoles more closely matches what we have on the PC. Even if mark ups are thin on the hardware itself the side benefit is that all the major games are being developed on AMD hardware and can be ported very easily to any one of the other platforms. I think that is a huge win for them.

The previous generation was completely different as the Wii was a purchased product and had no relation to the Radeon line, and the Xenos was more of a custom design that was not an actual copy of a Radeon chip.

They probably made a decent profit as I don't think they did much in terms of GPU design. My guess is that is was more about modifying the the memory interfaces.Reply

Unlike the Xbox 360 and the Wii which were using designed by ATI chips and only getting royalties, AMD this time is manufacturing the chips and giving them to Sony and Microsoft, plus royalties, its a much different scenario.Reply

Quote: GPU revenue also increased year-over-year up $75M with the release of the popular Radeon R7 and R9 products and strong Average Selling Prices of those devices. Sequentially, GPU revenue fell $30M due to a decrease in semi-custom SoC sales.

Please re-post this. Your numbers are based on Operating Income for the Graphics and Visual group, however you are stating the differences as if it's revenue (not op. income).

Their "Computing Solutions" division (CPU/APU/chipsets) revenue in 2012, 2013 and 2014: 1203, 751, 663 million, what used to be AMD is disappearing fast and is now less than half their revenue. The GPU business is stable and they have a big boost now from the consoles which also keeps them almost profitable, but their core business is still in big trouble and those PS4/XBone sales won't prop them up forever. Those R&D investments keep going down...Reply

Actually the results are rather poor with one bright spot.CPU segment is so low nowadays, 2 years ago it was 1.2 billion, now just 663 million.GPU (just the GPU w/o console) was up sequentially and that's surprising and good.In console sure Sony did better than expected with some 2.8 units sold in Q1 and M$ sold maybe 1.7 mil units in Q1 but those are low margins for AMD and at some point soon enough sales will peak.Wall Street might like the results enough but i don't think we should be all that happy with AMD's extinction in the CPU business.As for the ARM SoCs, they are sampling it but only shipping in Q4 and relevant revenue wont come all that soon, plus they are on 28nm, others might be shipping 20nm soon enough.Reply

Actually, Globalfoundaries (AMD's fab) and Samsung made a deal to implement 14nm FinFET. So, this could be a catalyst for AMD to speed up their 14nm designs and potentially catch up with Intel. Hopefully, for AMD's sake, they have been apprised of this deal before the news went public. http://semimd.com/blog/2014/04/17/globalfoundries-...Reply

"AMD (NYSE: AMD) today announced that it amended its Wafer Supply Agreement (WSA) with GLOBALFOUNDRIES Inc. for 2014. (...) "The successful close of our amended wafer supply agreement with GLOBALFOUNDRIES demonstrates the continued commitment from our two companies to strengthen our business relationship as long-term strategic partners, and GLOBALFOUNDRIES’ ability to execute in alignment with our product roadmap,” said Rory Read, president and chief executive officer, AMD."Reply

I think the console wins, more than anything, will help AMD win additional custom silicon customers. The CEO mentioned in the earnings conference call that there were 1-2 potential customers this year that haven't been inked (read: could still fall through) that would produce $200-500+ million in future revenue. AMD's future may still be speculative, but in my opinion, they are on the road to recovery.Reply

The ARM side is hyper competitive and the giants like Facebook/Google/Amazon would have enough volume to merit a custom SoC design. Using AMD (or Broadcom, or Qualcomm etc.) to design the SoC could mean that the chip meant for your company winds up being sold to the competitor unless you're willing to pay a bit more for an exclusive contract. Google and Amazon are also the type of companies that aren’t afraid to license the 3rd party IP and design the SoC themselves.

The GPU side is interesting as I can see demand for customer SoC’s focused on supercomputing. The problem with supercomputing is that there isn’t enough raw volume and money to merit these designs. AMD’s GPU designs have not proven themselves in the ultra mobile market yet so that rules out another sector.

That leaves the one ace up AMD's sleeve: x86. The problem I'm having is figuring out who has enough volume to merit a custom x86 based SoC.

Well there is the obvious answer of who already has them today: console manufacturers. Nintendo is still on PowerPC with the Wii U. Despite its poor sales, it still seems premature to replace that with a new hardware platform. Valve’s steam box efforts appear to be rooted in 3rd party designs with SteamOS being licensed to them.

The datacenter giants like Facebook/Google/Amazon are Linux based and eyeing the ARM SoC's. I'm just not seeing enough in their software stack that is dependent upon x86 to merit a custom chip.

Similarly the enterprise networking guys like Cisco tend to design their own custom SoC’s already. Cisco has announced they’re going with Intel has a foundry partner for some designs.

None of the PC OEM’s are brave enough to go this route. They’re hyper risk adverse and feed off of generic designs. It doesn’t help that the PC market themselves is also shrinking, further compounding the situation.

The FPGA guys are based around ARM and some have even worked out deals with Intel to manufacture chips (with ARM cores no less).

Apple is an option as they like to do things their way. Though they’ve been able to get some oddball parts from Intel to meet their demands, though nothing like a full SoC. Apple’s Mac line does have enough volume to merit a custom SoC design. It is just difficult to see Apple leaving Intel. And if Apple wanted to ditch Intel, they’d just *buy* AMD and add them to their internal design teams.

There is always the hyper longshot of nVidia. They've been reportedly wanting to compete with Intel on the desktop but have never been able to get an x86 license. Granted nVidia would want to include their own GPU technology and the companies have a few lawsuits going back and forth. Yet they're one of the few players that'd make sense to ink a custom deal to get x86 CPU cores into a custom SoC but there is too much bad blood here.Reply

Great points. I'm sure AMD investors dream of an Apple buy out. But, I see your point. The custom silicon business in the x86 realm is few and far between. Maybe, at this point, AMD can only hope that the console wins will improve their clout in the silicon industry, perhaps opening doors that were unavailable in the past. Regardless, I still believe AMD can be a player against Intel, but probably will never reach its previous heights in the mid-2000s.Reply

Actaully, you missed all the interesting news, which came out in the conference call:1) OEMs are now producing Beama and Kavari laptops2) GPU and console chips will start to be made at Globalfoundaries3) AMD will announce 1-2 new customers for their custom design businessReply

OK, so no surprises, but share price up 5.96%. Since it's up by that much, there must be a surprise lurking in there, somewhere. Where's the analysis?

"Consensus earnings for Q1 was $0.00 per share non-GAAP, which AMD beat at $0.02 per share."

So the consenus earnings of analysts was off. I'd like to see where they went wrong. THAT's the analysis. What were the mistakes made by the analysts? Where were they off? Where were they surprised? It's funny with financial "analysts," whenever they are wrong it's not their fault, and the so called "analysis" is just a data read out.Reply

I have been reading these financial reports articles for a few years now and despite negative dollars this is a positive report for AMD. I mean they were bleeding profusely for years and now they have blood from scrapes. In another five years they may even be profitable. I love AMD and am happy they are still around.

It is no surprise that CPU sales are down - it is directly correlated to their investment in CPUs. Intel's sales would be crap if they were still trying to push Q6600's. Other good news is that AMD (GloFo) has licensed finfet tech from Samsung. We need updated manufacturing technologies for AMD and Nvidia.Reply

Poor little AMD, forever crippled into the runt of the semiconductor business by Intel's years of illegal anti-competitive practices. It is pathetic watching AMD's "high end" struggling to compete with Intel's entry level. GPUs are fine... but that is a small consolation considering good old Hector RuiNz paid for ATi more than AMD + ATI was worth a few months after the acquisition... which ended up cisting AMD their own fabs, so now they end up being a client at their own foundries and with even slimmer margins...Reply